Thursday, February 26, 2009

In God I trust, rest strictly in cash

Reports that Ranbaxy had falsified test records filed with the US FDA. Avesthagen, a 'bio-tech' company sees several independent directors quitting. The owner of the company said that the company has three audit firms. But fact is that co has reduced staff, is seeking loans and equity all over again. Real estate companies are now going to face ire of people. Projects getting delayed, buyers ganging up for price rebates, and traditional dishonest practices of real estate companies now getting aired. Recession is a good time to shoot the breeze. People accusing Siemens of jiggery pokery in transfer of Indian subsidiary to parent company.
Virtually all Indian companies are going to be under the lens. Whilst nothing new will be discovered ( dishonesty is a way of life for Indian companies) media can have something to fill the pages.
One ex-minister sentenced for accumulating wealth beyond the known sources of income! This is hilarious. No politician wants to comment because he knows that when he points one finger at someone, the other three and the thumb are pointed at himself. Let us cut the charade and get on with life. How many career politicians you know have any 'known' sources of income but are reported to own wealth far beyond any limit? The other thing is to find out if you know any one politician whose wealth is smaller than what his income ticket is? We Indians accept corruption as a given fact.

Saturday, February 21, 2009

A heart doctor with the wallet in his head

Yesterday, a bombay paper reported that one Dr Bhattacharya, backed out from performing a heart surgery. Apparently, he had initially agreed for Rs.7.50 lakh for a few hours surgery, and then changed his mind and hiked his fee. When the patient / his relatives did not consent for the hike, he just cancelled the "appointment". So, they went to another doctor.

In Bombay I have seen and heard of doctors who behave even worse. I also wonder whether any of these doctors really pay taxes on their full income. Surely, @ 7.50 lakh per heart and 300 hearts in a year, the said doctor should be netting over 20 crore rupees annually!! And this should be his minimum fee!! And the best part is that he would be collecting fees upfront and even if the patient dies, he collects.
How unlike a plumber who we will not pay if he does not stop the leak!!
I think that if the tax guys raid all the top 'brand' doctors in the metro cities, they can have a ball!!

Satyam- Bury it now.

The Satyam affair should be banished from the news. It is a classic cover up game going on.
The funny thing is that the CLB (which I think has been the biggest tool of the Congress in this cover up) now wants "strategic" investors in Satyam!! Why should anyone throw money in to a sinking ship? Perhaps only L&T is stuck so they will get to become a "strategic" investor!!
If you still have any shares in Satyam, sell it and get the hell out. The share is probably not even worth Rs.5/-.

Front Page Lies in Times of India!!

Yesterday, I saw a Times front page story which said that the Indian economy is now on a recovery path and cited some one off statistics. How naive!! It read like a government of India handout or a UPA handout. Surely, Times of India would have charged fees for carrying a vested interest story.

Well, my call is that our GDP is headed for a NEGATIVE growth in FY 2009-10.
All signs on the street point to that and government stats will perhaps keep lying till election time is behind us.

Tuesday, February 17, 2009

A glass that is half full- Proud to be Indian

Having spent my working life so far in the murky world of finance, everything looks dubious. The weekend in Pune was a breath of fresh air. There was a book launch (Pathbreakers 2- By Sucheta Dalal and Debashish Basu) and the rostrum was weighed down by a dozen self made men. Three of them from the field of science ( Dr Bhatkar of Param fame, Dr Mashelkar and Prof MM Sharma) gave a different meaning to optimism and cheer. They have spent their entire lives in PSU's, working for what would be pittance as compared to most of us in the finance world. The panel discussion was on 'governance' and the views from these three were fantastic. Their acheivements in the face of government processes and procedures, sparse budgets etc are beyond comments by nitwits like us.
Their main contention was that 'governance' is a word used by the under acheivers and the born cribbers. Their encouragement and optimism was an eye opener. At each stage they said that governance is 'within' you. You are the instrument of change.
They left us numb with their perception on worldly matters and their optimistic approach to life.
I wish I had heard them a few decades ago.
I also urge people to get hold of the book. The two volumes have interviews with 51 remarkable people. And each one of them (except for the habitually fibbing finance guys who have been interviewed) is an inspiration to each and every Indian.

Thursday, February 12, 2009

The investment game

All of us in the investment banking world know what we do to others' money, so that we make our money. In this context, there is a fascinating retirment letter written by hedge fund manager Andrew Lahde, who produced a one-year 866 percent return betting on the subprime mortgage collapse.
He announced he was leaving the hedge fund business with a rather hysterical letter…

I enjoyed reading this letter.

Tuesday, February 3, 2009

Corporate Governance- Government of India style

With elections to come, the government is on an overdrive to get mileage. Advertisements are being released by PSU companies with photos of Sonia Gandhi, the PM, some Minister et al. Whether it is ONGC or SAIL, they all find some reason to splash the photos. The common thread is Sonia (as head of UPA) and Manmohan Singh.
As a listed PSU, how can these companies justify spending money on any advertisement which has Sonia Gandhi? She is not a minister nor is she formally anyone relevant to the working of the company. Of course, we all know that Sonia runs the country and the rest of the dummies are the faces on the rubber stamp.
How can these companies justify these adverts? How with the CAG (the statutory government audit board) permit these?
If PSU companies are forced to do this by the UPA which wants to highlight its 'achievements' during its five years of misrule, what right does any one in the ministry have to speak about governance?
There should be a strong case for these PSU's to recover the monies spent on these advertisements to recover them from UPA or from the Board of Directors of the companies concerned. Why should shareholders have to bear the burden of advertisements which do not give any value to the company?
This validates my stand that whilst most PSU's have great businesses, it is foolish to become a shareholder. The ones in power will make sure that very little reaches the shareholders.